Saltydog Portfolio: storming heaven from all directions

robot-looking-like-human

Isaac Newton said: 'I do not know how I may appear to the world, but to myself, I seem to have been only like a boy playing on the seashore, diverting myself now and then in finding a smoother pebble or a prettier shell than the ordinary, while the great ocean of truth lay all undiscovered before me.'

What would he have made of today's world, where scientists are rewriting the rules of the planet along with the very fabric of our world? They would appear to be cracking the 'God code' to unlock the secrets of matter.

There are some, however, who now say that we are flying too close to the sun - that the advances of science are out of control, and must result in disaster and the appearance of the four horsemen of the Apocalypse.

No doubt those people who in the future are able to be cured of generative organ failure or cancer, or recover their sight through the use of stem cell technology, may take a more positive view.

TECHNOLOGY REVOLUTIONS

Whichever side of the fence you are on, one fact is undeniable: change, and the acquisition of knowledge, is moving forward at an exponential pace, and to take advantage of this situation we need to be well-informed and quick on our investment feet.

A basic look at how technology and finance has progressed might produce a table like that below.

FuelCommunicationTechnologyFinance
First revolutionCoalPrinting pressSteam engine17th Century coffee shops
Second revolutionOilTelegraphCombustion engineLtd companies & banks
Third revolutionSolarInternetRobotics/AICrowdfunding/online banking

I believe that the world is rapidly moving from the second revolution into the third.

At Saltydog we are looking for those fund managers who are concentrating their investments into a spread of businesses working in the technologies of the future, just as Microsoft, Google, Facebook and many others have been for the funds of the Information Age of the past 20 years.

One of the front-running technologies of today is robotics. There is a genuine need for robots in developed countries to assist with repetitive jobs and an increasingly elderly population. Fertility rates have fallen to around 1.7 and 2.0 is the number required to keep the population levels steady.

saltydog-ocean-liner-portfolio-performance-decemberThis, along with people living longer, creates the problem of an ageing population. Yes, there is the problem of how to finance the elderly, but even if this was resolved there will not be enough young people around to do care work.

Japan is the country with the greatest need and the Japanese, along with the Americans and South Koreans, are leading the field in the development of robots, both for industry and for the home.

INVESTING IN ROBOTICS

At Saltydog we are looking for those technology funds that are investing not only into new technologies generally but into robotics in particular.

There are a number of technology funds such as Axa Framlington Global Technology, Henderson Global Technology, Cavendish Technology, MFM Techinvest and L&G Global Technology Index Trust that have all experienced returns of around 20 per cent over the last six months, but as yet only a small amount of their money would seem to be invested in the sciences of the future.

There are however three funds that we are watching that are directly involved in robotics: Pictet Robotics fund, ishares Automation and Robotics ETF and Scottish Mortgage Investment Trust.

saltydog-ocean-liner-aset-allocation-decemberScottish Mortgage Investment Trust has the most unlikely name for a company which invests in these technologies of the future, but that is exactly what it does.

The two major Japanese companies that are heavily involved in robotics are Honda and Toyota, but this must form only a very tiny part of their overall business.

In general terms, at Saltydog we are still very concerned about the overall global financial situation. How the markets will eventually reflect Brexit and future Trump administration is still far from clear, and the European Union is heading for a shake-up with so many elections due in the coming months.

This is reflected in the make-up of our portfolio and the large amount of cash that we are holding. Hopefully early in 2017 some direction either up or down will become clear and we can then set our investment stall up accordingly. At the moment, all this uncertainty is just making the inside of my head itch!

saltydog-funds-december

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